Good afternoon, today we have with us Mr. Sunil Jain, President, Rajoo Engineers, Rajkot, India.
Plasticsinfomart : Sir we would like to start with your background first and how you started your journey into plastics to where you are today?
Sunil Jain : I am basically a mechanical engineer from BITS Pilani and graduated wayback in 1978, and my entry into plastics is purely accidental. I joined Paharpur Industries for a different project altogether and they were getting into flexible packaging and they said why not you, so I said yes why not me.
So, that’s how I started off in flexible packaging. This is going back in 1983-84, since then I have been in this industry with Paharpur first then I was in Kenya for four years with General Printers and then with Rajoo Engineers for quite some time.
Plasticsinfomart : You started with Paharpur and with a long journey now you are with Rajoo. So you must have seen lot of entrepreneurship happening around. Would you like to shed some light on how well the corporate structure has been incorporated by the Indian Plastic Industry?
Sunil Jain : Plastic industry per say whether it is in India or anywhere in the world is an owner managed, owner run industry. Here I am not talking about the plastic producers, but plastic processors. So whether they are plastic processors or plastic processing machinery manufacturers, all of them are owner run and owner managed companies even till date. Having said that, yes there is lot of professionalisation that is happening. More and more people have taken up this as an assignment, but it still remains owner run and owner managed industry. And that I don’t see changing. And as long as they are successful it really doesn’t matter. But there are more and more professionals who are getting into this business. Even if you see a company like Reliance today, it is still owner managed, inspite of it being in very large public domain.
Plasticsinfomart : So what is your call, shall we need more professionally managed structure or is it good enough the way it is.t;br />
Sunil Jain : No I dont think that is important. I don’t think we should discuss that, because the important thing is industry has too many variables which makes it challenging. So the owners also enjoy taking up those challenges. They also want action everyday. In the morning you dont know what you will be doing during the day. So that is something which fascinates the owners as well as professionals. I dont think it is important what should happen, whether professionals could run it better or owners could run it better.. And today the growth rate you are seeing is despite of it being an owner managed industry. Important thing is they should be successful.
Plasticsinfomart : Rajoo carries a long story of success with it and you must have witnessed hurdles faced to achieve this success. Would you like to share some key hurdles faced while achieving this success.?
Sunil Jain : I think we need to look at it with two points of view. One is technology and one is market. In terms of technology, it is a fact that we have always been in the forefront of technology. In whatever sectors we are in, we are the first company in India to bring those technologies. And that has happened because the people who are at the top, the owners who are at the top, are pure technology people. They started off as processors. So they have a feel for technology. And they are able to utilise the technology and adapt the technology. So that’s from a technology point of view. Yes, we have faced many hurdles in whatever new things which we make and today it is a fact that in this industry we did not have any foreign collaboration who can give you the drawings. So we have created those drawings, we have created those concepts, we have copied those concepts and understood them. So the hurdles always were whenever we were doing something new. But because of our understanding of the process we were able to cross those hurdles.
In terms of market, when I joined here, my main mandate was exports. The biggest problem we faced was India did not have a good name. And many people who are in our industry and who were doing exports got a bad name for the country. So we had an obstacle right on day one. The challenge was to get people to start accepting you which made a lot of demand on us in terms of service backups, in terms of quality. I remember the first machine and the second machine for which we got a very big order, the delivery period was four months and it took us nearly one and a half years to deliver that machine. Because we made that machine thrice. Because we were very clear that we will not sell junk. So we are very quality conscious. Cost was not an issue. We wanted to deliver a good machine, right at the first stage and today that company has above twelve machines from us.
So that was a big hurdle, trying to keep a customer happy on one side and manage such a long delay. We made them realise that what we are trying to make is something genuine and not something with which tomorrow you have a problem. And the result of that today is that we are present in about 50 countries. We are present in Europe and Latin America. Our visibility has grown. Today we are recognised as a global player. Anyone and everyone in the industry knows us. We participate in K regularly, we participate in Chicago very often and any exhibition you see, we are there. So these were the hurdles and challenges which were there and we were able to handle them.
Plasticsinfomart : If we talk about standards of machines in india specially the sector catered by Rajoo, how would you compare them with the European standards ?
Sunil Jain : Standards are not the issue. Standards are same. It’s only the workmanship which becomes important. In terms of machine tolerances, we are yet to reach that level. In terms of technology, today we have most of the technology. The gap in our industry in what is happening in the best of the worlds and us is not too much. But yes there is a cost of getting that workmanship. And it was a chicken and egg situation and in India people are not willing to pay for that workmanship. So we have to give them that workmanship and still get a lower price for them. And that is where our being in the exports helped tremendously. Because we were able to charge them more and we were able to give them a high level of workmanship.
Plasticsinfomart : So there is no gap in indian machine standards and that of european machines in your segment ?
Sunil Jain : No, not much.
Plasticsinfomart : I would like you to shed some light on the packaging industry of India and the different segments covered by Rajoo?
Sunil Jain : I always put it very clearly that, we have a long way to go. And, we are not running as fast as we should run. In the blown film segment itself, the organised retail holds such tremendous opportunities, that we are not able to visualize them. And the industry will lose out if they do not modernize.
Food packaging constitues a major chunk of organized retail. And food packaging needs major packaging material. When you talk about food packaging you talk about material for variety foods. So there is lot of investment needed, which people are hesitant. And organized retail chains are not going to wait for anyone. If they need material and no one can give it, they will import it. And that’s an opportunity loss. So that’s a tremendous opprotunity for us. Organized retail has tremendous opportunity, agriculture is a very big opportunity. Material handling, bulk packaging are very big opportunities. If you put these three together, in agriculutre and bulk packaging, we are hardly doing anything.
Plasticsinfomart : So is Rajoo manufacturing machines to cater all these segments ?
Sunil Jain : Yes Rajoo caters to all these segments. And let us also understand that what I am sharing with you is nothing new. We have seen that happening in other parts of the world. It is a question of someone siezing the opportunity here and doing it. Whateverwe are doing at Rajoo engineers is not rocket science, we are not doing anything new. What is happening anywhere, we are bringing it here. And we have seen it happening, we have seen the challenges which were happening overseas. We have seen the change in markets which is happening overseas. And it is a known fact in the industry that whenever we have brought up something new in Plastindia, people have always said, these guys are crazy, this is not for India. And three years down the road, the same people are doing what we are doing three years ahead of them.
There is a tremendous opportunity in all these sectors.
Plasticsinfomart : What are the geograpahies covered by Rajoo today ?
Sunil Jain : Worldwide, if we start from the top, we have customers in Latin America, we have customers in Europe now. Africa has been very strong for us. Asia pacific we are there- Malaysia, Thailand, Vietnam. Then Sri lanka, Bangladesh and Gulf. We are also present in in Iran Saudi Arabia and Aae.
Plasticsinfomart : And if we have todifferentiate in terms of percentage of exports to that catered to India, what it would be?
Sunil Jain : Last and year before that it was nearly fifty fifty. But this year we have seen a major shift that the Indian market has grown much faster. This year end we should be 70% domestic and 30% exports of our increased turn over. So the absolute value of our exports have not came down. To give you an idea of figures, March 31st last year turn oer increased by 52%, this year it may be 30+ percent. So in absolute terms our exports are not down. But in percentage terms they are down because in domestic market there is a boom.
Plasticsinfomart : So what would be your suggestion in particular for the processors in India to grab the on lying opportunities?
Sunil Jain : They should buy more machines. Technology is shifting towards high output levels. Which means the cost is coming down. It is moving towards higher automation levels. And we have brought automation today in the country at anaffordable levels. So these two things have to happen. And in food packaging as I was talking about, people will go from three layers to five layers and seven layers. So these are things which people need to do, which is happening but not at the speed at which it should happen.
Plasticsinfomart : Is the rapid growth in Chinese markets could somehow be an alarming situation ?
Sunil Jain : I would not say that we should not be afraid of Chinese machine manufacturers. But in our industry Chinese entryis still not there. I am talking about films and sheet business. The reason is because the unit cost of machine in our case is higher in our case in comparison to molding machines. Then, there is a lot of technology here and China is not ready with it today. . it will take time. But when they will come to that level we would have proceeded ahead as well. We are not keeping quiet. It is a cause of concern, no doubt about it, but not an immediate threat.
Plasticsinfomart : In recent couple of years a quite recession has been observed. In the segment catered by Rajoo, films and sheets, what was the scenario in these times ?
Sunil Jain : Let me answer it very simply. We have never seen a better time. It has been a golden period for us. Like I mentioned to you, 52% growth last year and now 30% growth. If I had more capacity and people, we could do 100 % ,more.
Plasticsinfomart : Do you suggest GoI is taking good enough steps to support Plastics and packaging industry of india?
Sunil Jain : Unfortunately, no. They come up with these notifications, banning use of plastics. Infact, the GoI, a part of it is discouraging the use of plastics. So we as a lobby and as an industry needs to standup and grow. Banning of bags, not promoting bio-degradable and recyclable materials in a proper way. These are impediments in the name of environment. In the recent quote which was given by Mc Kinsey, which says “ plastics actually reduce the carbon footprint as compared to any other thing”. Someone has to tell them this is what it is. But, no there is no support from the government.
Plasticsinfomart : Any three application you suggest as growth subjects in the indian plastic industry?
Sunil Jain : As I mentioned, three biggest according to me are organised retail, agriculture and bulk packaging. Organised as I explained is basically food packaging. Agriculture is green house films, mulch films, geo membranes, canal linings. In buk packaging we are talking about container liners which can be a huge application. Container liners for both solids and liquids.
Plasticsinfomart : I would like you to suggest any three key thumbrules of success as per you for any entrepreneur in the packaging industry in India?
Sunil Jain : I think one basic thumbrule has to be selection of technology. You have to be very clear which market segment you want to target. That is very clear and from that you chose what technology you should adopt. See for example, you want to supply to Nestle, and you want to buy a printing machine from across the road. Useless, you will spend years to try and to come to the levels adopted by Nestle. On the other hand if you say I just want to supply to someone who is making low quality pan masala pouch, it is fine. So you have to be very very clear as to what is your market segment. That will then decide what will you use as the most appropriate technology. You cannot say I want to do the best, and I will employ anytechnology just by skilled people. It will not work. You have to go for machine with automation. If you dont have the money dont do it. Do something else.
Plasticsinfomart : Any thing you would like to change in the current scenario in the plastic industry in India?
Sunil Jain : We have to get the support of government of India. How we will do it, how we will get it, I dont know. But that is which can really bring lot of change in the indian plastic industry. A pro active support.
Plasticsinfomart : Support in any particular direction ?
Sunil Jain : One direction is banning of plastics. But then what ? These kind of things create confusions in the mind of investos. I know people who are ready with scale up for expansion and capacity. But when they read the notifications, they know fully well that they may not be fully implemented but still they hold themselves back from investing. So govenrmentnneeds to have a very clear cutvision of where they want the plastics industry to be in india.
Plasticsinfomart : What is your vision for plastics and packging industry in india for 2020?
Sunil Jain : It has been already said that by 2012, we will be third largest plastic consumer in the world. By 2020, I tink we will be top most. Not the third but the largest consumer of plastic in the world. And when you talk about largest consumer of plastics, everything flows from it. The technology, the machines, the market, everything.
Plasticsinfomart : is it different when we say consumption per capita and consumption of a country ?
Sunil Jain : Per capita consumption is very misleading because at times you are also considering countries like those in Africa. They have large population but they dont consume plastics so much. So we are on the growth to become a developed economy. We should not look at the world average. We should look at bigger goals. I think US has average consumption of 105 per capita. So why should we look at the world average. We should look at the average in developing economies. From that point of view the potential is phenomenal.
Plasticsinfomart : I wouls like you to share your message with clients and sharehoders of Rajoo.
Sunil Jain : I would say buy more machines and expand your capacity. Simple, . you cannot go wrong. There is tremendous growth potential.
Same message for Indian Plastic Industry. Dont stop. There is tremendous growth and potential. This is a study done byPplastindia and other that shows that in terms of plastic processing capacity. And go world-class, in terms of quality and quantity.